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How much do you need to buy a home in California?

How much do you need to buy a home in California?

By Ron Trujillo/ron@calhomenews.com

California’s affordability housing rate remained at a near-record low during the third quarter, despite slightly higher wages and lower mortgage rates.

Less than one of every three Californians (31%) could afford to buy the median-priced home during the July through September period, according to the California Association of Realtors.

The affordability rate remained unchanged compared to the second quarter and slightly higher than the record-low 29% in third-quarter 2015.

California’s affordability rate reached a record-high of 56% during second-quarter 2012, as the housing market downturn dropped prices but also greatly increased affordability.

The state’s affordability index was below 40% for the 14th-consecutive quarter.

The average homebuyer would need to earn at least $100,000 to buy a home based on the monthly mortgage of $2,510, which includes principal, interest and insurance, during the third quarter.

Five counties – Kings, Kern, San Bernardino, Fresno and Merced – boasted 50% or greater affordability rates during the third quarter. Kings County was the most affordable at 57%.

The Bay Area, historically the priciest region in the state, has three counties with affordability rates of less than 20%. San Francisco County had the lowest rate at 14%.

 

 

 

How CAR determines affordability

The California Association of Realtors’ affordability rate is based on the median-home price of $515,940. A buyer would need annual household income of $100,290 to qualify for a loan to purchase the median-priced home.

The monthly payment on a fixed-rate, 30-year mortgage would be $2,510. The figure also assumes a 20% down payment and an interest rate of 3.76%.

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